The Oil Man: Oil price, Shell, Petrofac, Sound
15th December 2016 11:59
Share on
WTI $51.04 -$1.94, Brent $53.90 -$1.82, Diff -$2.86 +12c, NG $3.54 +7c
Traders told me yesterday that the market was looking to have a correction, so, when the Energy Information Administration inventory stats came out, although initially pleasing, they found some dirt.
That was in the fact that, although there was a useful draw of 2.6 million barrels, better than forecast and the American Petroleum Institute number, it was "in the wrong place" - on the West coast - while in fact at Cushing it was a build.
You can only please some of the people some of the time.
Shell
It is sad to see Simon Henry leaving ; for me and many others he has been Mr Consistent as head of IR and then CFO. But he deserves the rest it will become and a life of luxury - although I suspect many non-exec jobs beckon.
He is replaced by Jessica Uhl, who was with Enron in Panama before - which seems scarier than it really is, one hopes…
Petrofac
I will come back to and other OFS companies later in the week - time is short today - but the trading update this morning is a bit mixed.
Net profits are expected to be in line with expectations at around $410 million (£328 million), with the Group (excluding IES) better at $465 million, but a worse situation at IES of a loss of $55 million.
The sooner Ayman can boot that lot into touch the better. As one might expect, revenues are "record" and the company is running very efficiently, but order intake, at $1.4 billion, is low field and the backlog is only $14.5 billion.
The market remains "challenging", but I expect order inflow to pick up sharply in 2017 as delayed orders come through.
Sound Energy
An update from this morning: at TE-7 the reservoir pressure correlates with previous wells, which is further good news from Tendrara.
It also announces that TE-8, the step-out well, is going to be a full 12km from TE-7 - a confident call - and the firm will drill for the TAGI and the Palaeozoic there.
As for numbers, it has announced that it's put 1.5 trillion cubic feet (TCF) as the top-end for TE-8 alone, which puts the range at between 0.5 (up from 0.3) and 1.5 TCF.
After all that, the company will produce a Competent Person's Report and, if all goes to plan, add more value to the play.
With this and Badile likely to spud also in February, the momentum at Sound continues and shareholders have much to look forward to next year.
I will catch up with a number of other results etc tomorrow.
And finally…
A busy night of football last night, as Chelski cemented top spot in the league, while wins for the HubCap Stealers, Spurs, the Noisy Neighbours and the Red Devils kept the pot boiling.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.